The Top 100 Markets Expected to Crash & Burn in the Next Year

Foreign.

This is the no Closer show where you get the latest developments in distressed note investing and learn the secrets of how you can control millions of dollars worth of property. For panties on the dollar. Get educated and entertained by someone who has closed thousands of deals and lives to support you in achieving the same. Now, here's your host CEO of We Close Nodes, Scott Carson.

Good morning, good afternoon and good evening, everybody. Hey, hope you are doing well today. This episode of the Note Closure show. It's Monday here in Austin, Texas. It's a beautiful day. It's humid as hell. I was out walking this morning and definitely like woo, the humidity kicked in, especially after all the rain we had this weekend too. Just we're a little saturated. Like a sponge. My yard is like, like a sponge walking through it today. But anyway, guys, hope you're all doing well. I'm feeling kind of festive. It's summery. It's the week after the 4th of July. It's a little bit slower in the note industry because a lot of people are taking this time off vacations and holidays and, and just having fun and it's a little slower. So I always like to look at this time as a time to kind of do a little bit of due diligence, to look at the markets, to look at where opportunities are lying right now or in the future. And while you guys can track foreclosure markets right now through foreclosures.com or here in Texas through the Roddy List, FLS Online, which gives you kind of a snapshot, you have to look at where things are changing and adjusting. And now over the weekend, I think you saw last this last Friday, the Wall Street Journal came out with an article and let me share some stuff here for you real fast. Me share my screen because I've got some stuff pulled up here I want to go through. So anyway, like this episode might piss a few people off and I'm sure gonna have people are going to argue with me about it. But it's here to talk about the top 100 real estate markets that are going to burn in the next 12 to 24 months. Now, I don't mean they're going to go up in flame. They're not going to catch fire, you know. You know, it's not the end of the world. I mean we'll feel like that for the a lot of folks. But when this article that came out this past week by the Wall Street Journal listed one of my favorite cities, one of my favorite places to go hang out and have Masterminds at stuff like that is Cape Coral, all right. And the Wall Street Journal said the worst housing market in America is now Florida's Cape Coral. Now that's a couple things. Now what's funny is this image right here, you see this image? That back tower in the center over there is where we host a lot of our mastermind events. It's the Western Cape Corps Resort. And Coral is a great area. It's right on the ocean, the Gulf of America. Okay. You got just, it's, you know, Fort Myers is near there, but all these houses have canals like this. And I've bought a bunch of stuff in Cape Coral, Fort Myers, Lehigh Acres, Punta Gorda Mean Yahoo Finance list of Punta Gorda is a bad area too. Yesterday or the day before they came out with their own article. And you know, I don't get me wrong, news articles are all about SEO grabbing and yes, are we trying to grab a little SEO this, this episode? Of course we are. But I always like to take it from approach. Now how can I take the information provided and capitalize it to use it in my endeavors? Because if you go back, if we all could have like a crystal ball, right, what would you do? Well, you would go back to when markets were valued the least and buy so that you wrote the appreciation wave, right. Or where housing markets were hit the worst. Buy as much you can at the bottom of the market and then write it back up, provided you can afford it. Right. I know a lot of guys and I was one of these guys who we bought a lot of stuff in Detroit. We bought a lot of stuff in like Flint, Michigan. It was cheap, held on to it for a while and sold it more at the top of the market. It's the whole idea of being a real estate investor right in southwest Florida. Gone there for years. Like I said, I once lived down in Naples and Marco Island, Florida. Really ritzy part of stuff and what's really caused this area to suffer so much is a not only insurance cost because of the hurricanes and a lot of people had damage with hurricanes and flooding and stuff. When you live on the canals like this, you're going to get flooded just like you know, anywhere you're living on the water, you run that risk of getting flooded. So insurance costs have gone up. A lot of these areas, a lot of these homes on here are also with investors buying stuff and then turn them in Airbnbs and try to capitalize on that stuff. That's always been the case with southwest Florida. Florida's always Been a big investment side of things. And I think back to 2008, 9 and 10, when Florida was roughly about 30% vacant. Okay, yes, it was about 30% vacant. And for every dollar invested in Florida, about 30 to 40% of it was outside money coming in. So you've had money come out, you've had prices go up. And what's happening now, prices are crashing. Prices are getting dropped like crazy. And if you follow people online, maybe you follow my buddy, Nick Gurley. All right. Nick Gurley is with Revenger, the Revenger app, Revenger Capital. We've had him on the podcast a few years back. He's one of these guys that talks about the markets. He does what he walks around, he does stuff. It's kind of a doom and gloom. I mean, Nick's a kind of a nice, positive guy anyway. Although I don't agree on his talk about how there's no food in Austin. We kind of, you know, do not agree on that. Plenty of food in Austin. When he was living here. He doesn't live here anymore. He lives down in Florida now. He used to live in Oklahoma. So he kind of bounces around, kind of a digital nomad sort of say. But if you go to his YouTube channel, he talks about a lot of the doom and gloom. Prices cutting in Texas, in Florida, stuff like that. Areas that are seeing the most about a decline. And I have to give Nick some kudos now. Some people don't like him. I like Nick. I like Nick. I think some of his stuff is great. I think he's maybe a little dramatic sometimes, but you got to be that a little bit online when you're YouTube to draw headlines. But he does such a great job breaking down specific things, breaking down deals, breaking down price cuts and stuff like that. So if you want to check out his app, it's the Revenger app. I'm not. I don't get paid anything for it. But what I love about it is I can pull some information on specific markets, where things are at, zip codes. He's got a really great app out there for you to take a look at. And like right now you can enter your city, zip or state to track the 2025 housing market with analytics from Adventure app. Now I've got a buddy, also another realtor, who actually pulled the app, the download dump of all 855, like, major metros, that reventure tracks 855 cities. That's a lot of information on a spreadsheet. Well, I've got that, and I was Looking at the app because one of the things I look at as we as note investors, we see stuff six to 12 months ahead of time, right? Everybody, we see plenty of stuff way ahead of everybody. And when you look in the foreclosure domino effect, obviously things happen pretty fast here in Texas, but if you look at Florida, it takes a while for God's waiting room to get rock and roll thing. People that default today aren't going to see the foreclosure market till 6 to 12 months from now. And that can work in your favor if you're trying to sell a house that you're not paying, making payments on because it'll take a while for them to get around to it. But it also, it affects the value of every house around you. And while Cape Coral is in an opportunity, I think Cape Coral is actually an opportunity zone right now. Maybe not to buy a lot of stuff, but you definitely want to keep your eye on the market because the more it falls, the more it's going to rebound out, which is just going to happen. Now that will, I'm going to put an asterisk next to that because you don't know what insurance is going to do in the state of Florida. You may have to self insure. That means you may have to buy at a prettier price. Well, the great thing about note investing, we are buying at prices below retail substantially before what retail buyers are. So I like southwest Florida. I think there's an opportunity there by just more distressed debt, maybe not immediately now, but by the end of the year and going from there. And it's the same thing across the country, depending on what markets you're investing in, what states you're looking, what cities is. You need to know what's going on with those markets. Right. So I thought we would do a deep dive and look into kind of an idea of where the markets are going. Now this is, this is just a quick snapshot. I took the top 100 largest cities and then I'm best judoed them based on what Nick and his Adventure app feels is going to be a drop. Okay. And you can see down here where the biggest drops are going to be is going to be in the red. Right. The, the light purple is going to be a let, you know, 5 to 11% darker blue 12 to 16, light blue 16 to 21. The light green 21 to 24. The yellow is 24 to 28. The orange is 28 to 31 and then the red is 31 to 40. Okay. So you definitely See some hot spots that are going to be dropped. Now, Texas, they think, based on what Nick says, it's overvalued. And I would agree we've had some overvalued. We've seen that here in Austin. It's not a been a crash like some people like to say here locally, but it has been a price correction. And what I like is, is the spreadsheet that I have and I'll go through and I've uploaded to Basecamp. So if you're in our WCN membership, you've already gotten access to this tape or the spreadsheet with all that information that shows you. Oh, some great information. So let's dive into it, shall we? Let's look at that tape and we can go from there. So here's a spreadsheet that I uploaded a base camp for. Let me make it a little bit bigger for those that are watching you. So you can kind of see and you see across the top here. I want to kind of explain it. So he's got his city, state, the metro. Okay. He's got the home price forecast. Now what that means is on a scale of 0 to 100, if you're at 100, you're expecting a lot of good homes, a lot of prices. If you're below, if you're 50, you're midway. If you're below 50, you're kind of struggling. Now New York, New York still has a pretty good pricing home cast. LA is dropping. Chicago's above average. Dallas, Texas is down low. A lot of deal, not so much overbuilt, basically, I guess you could say. So that's kind of where it runs. A31 Phoenix, either below 50, you're gonna, you've probably got a glutton inventory that is going to need to be moved or sold on the market. It's been overbuilt. Like San Antonio is at 30. Where is Austin, Texas? Austin, Texas, 28. Now we've got a lot of more inventory here. All right, now what they also had on here, the value home home value growth year over year. So you've seen some increases, you've seen some reductions. Like Dallas is down 2.8% in the last 12 months. Houston's down 1.3. Atlanta's down 2%, Miami's down 2%. Got a lot of cities on here that are down percentage points. Right? Right. We look at Austin here. Where's Austin? Oh, I thought it just. There you go. Austin's down. It's only seen 1% growth of the last year. Okay. Nope, nope, sorry. It's down 5%. That was Pittsburgh. That's up. So I agree with those numbers. We've seen a dip, not a crash. Okay. Now what he has on here also, which is kind of cool, is the overvalued percentage. How much? Based on his analytics and things like that. And is the city overvalued? Okay. New York's overvalued by 6%. California's over by 15. Chicago's only overvalued by 5. Dallas overvalued by 23. Wow. Atlanta is overvalued by 26. Okay. Miami's overvalued by 20. Detroit's by 30%. When I found that kind of surprising, San Francisco is only overvalued by 6%. Took it down to Austin is overvalued by 6%. Because we had a bit of a correction last year. Right. Now, another thing it throws in here, which is nice to think is also which takes into consideration is the value income ratio. And what that means is the value of the property compared to the ratio. So like in New York, it's a 7.7 to 1 ratio. Okay. 7.1. It's basically time is 7. You know, homes are 7.1 times more than the average income in New York. Okay. Okay. LA 10 times, Chicago three times. Dallas four times. You know, Houston's 3.8 times. Okay. Austin is probably a little bit higher at 4.4 times. Yeah. All right. Now the big thing to look at is here is this, the price cut percentage where he sees prices are going to probably dip the most. Okay. Now on the next side here is the population. We don't really worry about population, but this here is what you really need to look at. Right. What cities are going to be the hit the most over the next 12 to 24 months. All right. I think it's kind of spot on a lot of cases now. There's a bit of doom and gloom. Yeah. But, you know, there's some opportunity here if you know where to look. Okay. Especially in states that we buy in or markets that we buy in that have a little bit longer foreclosure process. Not like New York, New Jersey, which has two to three years. I kind of cut that out of the deal. Same thing with California. I'm not going to buy a lot in la, but. And I'm not going to buy in Chicago for sure because it's horrible there. But you start getting down to some of these markets, you're going to see a reduction in value. And by a reduction in value Guess what that's going to mean? It means people are going to start being upside down a little bit. People that saw had a lot of equity in their properties because appreciation last couple years, it's going to come back to more where they don't have a lot of equity. All right, so you're going to see increase in foreclosures that could lead to increase or increase in defaults, which leads to actually take this back. A reduction in value will lead to eventually because people already struggling to get by, right? They're overvalued, their house is more than what it's worth. People that are upside down in some cases, and I'm saying everything is going to be underwater because there's been a lot of appreciation. But it's going to lead to more foreclosures and people looking to sell to get out of the bad situation, especially when there's more inventory on the market. And that's why note investing is nice because if something's undervalued already compared to where it is, the values come in. Say they owe 200 values coming at 150, you know, we're going to buy that at 75 to 80, you know, 80 grand, maybe 75 to 100 upon where it's at. Which gives us some flexibility if you end up A selling it or B deciding to hold it long term for a period of thing, rentals and stuff like of course you need to know market by market, city by city for that. But it leads to the opportunity of things that are coming up. So that's what I wanted to say. So I just want to go through these top markets to give you a bit of an idea. So New York expected to drop 11%. LA is 24. All right, let's, let's rank these. Actually, I gotta. Oh, I know what I did. I used AI. I, I used my AI chat bot. I uploaded this list to them and I said, okay, where are the cities? Let me pull this up here. I should have it still up, did I not? I may have just closed it down by mistake. Okay, let me. So what I did is I went to Chatbot Chat GPT and I uploaded the spreadsheet. Okay. And I said cities that have over a million. Okay, give it a second to pull up here. There we go. So these cities have the biggest price cuts. Expect to see the biggest price cuts percentage over the next 12 months. Phoenix, Arizona reduction by 39% Denver, Colorado 38.6 Portland, Oregon 36 Salt Lake City, 36% Tampa, Florida 36 Austin, Texas 36% Jacksonville, Florida. 36 Charleston, just under 36. Dallas, Texas 35. Colorado Springs, Utah 3480. Can you give me the top 25 markets? You type that in there and let Chat GPT do its work. There you go. So you see more of these. So Minneapolis is going to hit Seattle, Washington, Detroit, Michigan. Ah, no, just ranked it by population. Sorry. Can you give me the top 25 markets with the biggest? I gotta state this properly. Second here. There we go. Now that's not. Now you're starting to get down here. So Riverside, California, Boise, Idaho. Riverside, California's in there twice getting lazy. Boston, Ogden, Utah, Chattanooga, Indianapolis, Raleigh, Atlanta, Columbus, Reno, Orlando, Charlotte, Sacramento, Las Vegas and then we get into Colorado Springs. So these markets are expected and that's where you have to look at things. I like Orlando. I don't think Ratland's a great place to probably buy. It's inland. Yeah, you probably still have a little bit of issues with insurance, but not as much as would say Cape Coral. There's still plenty of people flocking to, you know, Universal Studios and Disney World and Epcot and all this stuff. So this is things. Charleston, South Carolina. Yes. You might have a little bit problem with the insurance there, a little bit. Same thing in Jacksonville, Florida. But plenty of people are still moving there and people still need a place to live in a lot of cases. So that's what I wanted to share with you guys looking at. Is there any questions about where you guys are looking? What states are you buying in? Me make sure and enable a chat, which I probably forgot to do. And it's even got the city. This spreadsheet even has smaller cities. So if we just do. If we go back over here to the spreadsheet and just rank it solely, not rank that. We just basically solely do re. Rank it by cities, not population. Custom sort. Let's just do. And then you'll see. So like some of these, I don't know where the heck they're at but like it may give you a little bit more of a granular, granular, granular level in the market. So Vermilion, South Dakota as a below average home price forecast that's overvalued by 15% they're going to see price cuts because it's only 15,000 people. That's another thing to keep in mind. Population is a little small on that one. Okay. But dropping 44 Midland, Texas. Okay, dropping 43%. I could see that with oil and gas, stuff like that up that neck of the woods. Go to another so Altoona, Pennsylvania dropped 42% to Bequia, Iowa, 41. Roseburg, Oregon. See, Roseburg is in here. I mean Oregon's in here twice. Phoenix, Arizona, Denver, Odessa, Texas, Severe Sevierville, Tennessee. I don't know where that's at. I heard of that one. Decatur, Illinois, Portland. You can see these cities, Wildwood, the Villages, Florida. Oh, they're overvalued. They're by negative 4%. Oh, it's actually undervalued I guess, but they're going to have about a 36% price drop based on what they think. Okay, well if you ever wanted to move to South Florida and wear your. There you go, your pink flamingo shirts for the ladies or the gentlemen. There you go, now's your opportunity. Start looking for discounts there. Let's see. You know, look at, looking at this stuff, this is, it's meant to be an opportunist, that's what I'm thinking. Now obviously, what do you do to use these things? Well, the thing to look, keep in mind is you may want to avoid some of the higher valued cities and when you pull comps, understand that if you're in a longer foreclosure market and you have longer days in the market, you've got to figure a reduction in value, what, you know, what the asset is worth today versus what it's worth in six months. It's probably going to go down a little bit. The value is going to go down. So if you value at 150, you probably need to value at 140, 120 in the next six months. If that's the way it's going. I, I'll give you a great example. I had a guy sent me a, a property in Aransas Pass, Texas. Now Rans Pass, smaller community down where I grew up. I've been looking for assets down there. It's a three bedroom, two bath, like 20, 2100 square foot house and he has it for sale for 104 now it's vacant. It doesn't, it needs a little bit of rehab and update. But it's not such a bad looking house from the photos he posted. Decent looking. It's on a half acre too. Not a, I mean you've got some next door neighbors. The thing about it, it's unzoned. So right next door is a mobile home and across the street is a couple mobile homes. So it's not so bad on, on that for the most part. But the comps he gave, he said the comps are at 270, 250 and stuff like that. Well, when I look at the properties gave his comps, I those are in your, your cookie cutter neighborhoods. They're all brick homes, same square footage, same bed bath, but ideally not the same type of community. Right. So it shows his comps are off a little bit. And that's what you got to look at. Look at your comps, look at what's sold, what's going on, days on the market is going to become very important here the next 12 to 24 months. Knowing what can move for the price and you're going to see a big difference between a value and then quick sale price. If you hang around, this is what it'll be at. But if you need to do a 30 quick sale, 30 day quick sale price, here's the difference in the two and you got to figure that into your value. So don't be surprised if if markets are dropping. The idea here is to take a look at these things, identify, hey, where's the amount of, amount of distress and where to start targeting those markets. Start putting your feelers out for things in those areas. If you like you're looking for something, those areas, now's the opportunity. You know, I think southwest Florida, it can be the opportunity. I haven't bought much in the last two years there because I think it was overvalued. Now you have to look at where things are going to be at insurance wise and where, how far is it going to crash and how's it going to affect things so and then looking at these houses too, how many have been flooded? You know, if you can stay off the water, you're probably going to be better insurance wise. But a lot of those places are in the floodplains and it's just going to be an extra expense to add to your bottom line. So one thing, making sure you reach out and talk to your insurance companies, your first place insurance companies right now, are they insuring in Florida? Who would they recommend and start getting an idea of value to. You know what that cost is going to be and add that into your expense lane, especially when you're making offers on note tapes. Okay, any questions, any comments, any concerns guys out there for you, this is meant to be educational, not to be a gloom and doom. I think when markets do go burn it leads to an opportunity, especially for us as debt investors to come and buy that distressed debt at a bigger discount and then work our magic in a either keeping people in their houses or taking properties back and getting creative in the back end. Hold them for a while, you know, foreclosing, selling them, you know, renting them or owner financing. What are your, whatever your strategy is to do that you'd like to do. There are some definitely opportunities out there for you to take advantage of. All right, but you know, the thing is, if you're looking to buy a house, there's the opportunity, hey, there's going to be, you know, opportunities for you to probably pick up a distressed asset or an asset that you can pick up at a bigger discount now than you are in 12 months and you would now going forward and going from there. Let's see if there's any comments on those. Aren't watching live on YouTube. No. Hey guys, thanks for watching live on YouTube there for you. And the reason I bring this up too, guys, is I can Remember back to 2008, 9 and 10 when I was down in southwest Florida. I was down living with friends Jim and Wendy. They're in Marco Island. We were looking at tapes, hundreds of assets from several banks, Banco Popular, Oceans Bank, US Century bank. And they had hundreds and hundreds and hundreds of notes for sale at huge discounts. We were buying stuff at five, ten grand back in the day and then going through the foreclosure process, which would take 12 to 18 months on that aspect of things. And so that's something to keep in mind. We bought the bottom and it rode the wave up and did that in quite a bit of stuff there in Florida. So you can take that same opportunities. He keep an eye out, do some research on the markets you're big on. Understand, hey, if you can buy something cheaper than anybody else's, that gives you a lot more flexibility to make sure it gets sold at a cheaper price or, you know, to get people into it renting it from you at a little bit cheaper, below market rate. Right. But it still makes sense for us when it wouldn't make sense for the traditional buyer. All right, everybody, so go out, take some action, guys. Hopefully it was valuable to you. Like I said, if you're part of the WCN membership group for 99. 9amonth, you've already gotten access to the tape of 855 addresses. Those are posted in the base camp group for you. If you're not, you can get signed up for it@noteumbrella.com we are here to help you take your business to the next level. So go out, take some action. If you have any questions about that list or spreadsheet or opportunities, feel free to book a call with me@talkwithscottcarson.com that's talkwithscottcarson.com and we'll see at the top everybody. Bye. Hey real estate investors. If you have ever wanted to dive into the sexy side of real estate and become a note investor and not just somebody that owner finances properties or buys and sells on terms, but somebody who's actually buying debt from lenders, mortgage bankers, hedge funds on distressed real estate on both residential and commercial properties, now is the perfect time. And guess what? We have our upcoming three day workshop here in just a few days on July 25th, 26th and 27th. That's right, that's a Friday. Saturday, Sunday. You can join me live on Zoom on our Note Buying for Dummies workshop. We'll go through the Fs of how to find fund and flip non performing notes at huge discounts without having to use your own money. And we'll show you all the different ways that you can make money being a note investor. Day one's all about how we find these deals from banks, hedge funds and how you can automate the process of connecting with these people and get tapes and listen to you over and over again. Day two is all about raising capital and marketing and we'll show you how to tap into thousands of IRA investors who are looking for deals to fund and how to communicate and how to contact them and get them to fund your deals. And day three is all about the flip the exit strategies putting deals together. We'll mix in due diligence. We'll mix in the marketing side along with the structure side. So much stuff in three days live on Zoom with yours truly, the note guy, Scott Carson. Make sure you get signed up by going to Note buying for dummies.com or click on the three day workshop tab on our Workshop. Get signed up today as we're still running discounts and you too can soon become a no buyer.